Market witnessed vibrancy with Nifty touching all time record of 10k supported by better earnings from blue-chip companies, strong liquidity from domestic and foreign investors & benign inflation. Optimism on earnings growth and dovish tone from FED energized the market. Sensex is up by 21% on an YTD basis, while BSE Midcap & BSE Small Cap is up by 26% and 31% respectively.

Earlier market was expecting subpar numbers, but it was already factored in as a short term impact seeing solid long term growth. But on a positive note Q1 results so far has been marginally better than expected. Cement, Private Banks and Energy sectors were the outperformers. While 2W Auto, Consumer discretionary and IT were primarily underperformers due to GST and change in emission norms. Further, short covering ahead of F&O expiry and expectation of RBI rate cut took markets to new heights. On the global front, US FED kept its key interest rate on hold due to delay in economic activity which provided support to the market.

Week ahead...

Looking at broad indexes like BSE100, 21 companies have declared results till date (as on 24th July). On a cumulative basis PAT grew by 8% compared to previous estimates of 7%. Same kind of outperformance is visible on Sensex and Nifty-50 Index. Better than expected results from blue-chips will attract investors to large caps as compared to small & mid caps. However, it is also possible that this trend may change during the last phase of the result season which has a muted outlook. Having said that, any consolidation in the near-term should be utilised given strong growth outlook in long term and likely change in RBI's stance with a 25bps rate cut in the next week policy meet.